Timbuk 2

Q1 Consider the two categories of products that Timbuk2 makes and sells. For the custom messenger bag, what are
the key competitive dimensions that are driving sales? Is its competitive priorities different for the new laptop bags
sourced in China?
Answer
Q2 Compare the assembly line in China to that in San Francisco along the following dimensions: (1) volume or rate
of production, (2) required skill of the workers, (3) level of automation, and (4) amount of raw materials and
finished goods inventory.
Answer
Comparison of Assembly Line in China and San Francisco is as follows:
Q3 Draw two diagrams, one depicting the supply chain for those products sourced in China and the other depicting
the bags produced in San Francisco. Show all the major steps, including raw material, manufacturing, finished goods,
distribution inventory, and transportation. Other than manufacturing cost, what other costs should Timbuk2 consider
when making the sourcing decision?
Answer
Diagram 1: Depicting the supply chain for those products sourced in China -

Diagram 2: Depicting the bags produced in San Francisco –

Company T should take rts sourcing decision an the basis of following cost invoNB.d in
manufacturing oT the products.
- Costs of inventory ordedng and hailing are the major chunks of additional cost.
ThB.refore company should consider rt.
- Distribubon cost includRs transportation of final prc<Iuct to Deal markets. It increases duB. to
greater distance of customers foam the warehouse.
- Marketing cost invoked in sourcing of the product would be hlghRF dUR tO IOW BCOFlOITiIes of
scale, in the market.
• Pacltaging cast plays a major role in pñce determination of a pr‹x1uct.
• Reverse kigisbc cost where pnxluct is returned by customer back to local markets and
ultimately to manufacturer.
Hence, it is concluded that a company should consider all the costs involved in production of
goods before its manufacturing.